General Cable Corporation (NYSE: BGC), one of the largest and
most geographically diversified wire and cable companies, reported today
revenues and earnings for the first quarter. Reported diluted earnings
per share for the first quarter of 2008 were $1.21, an increase of 19.8%
from the adjusted earnings per share for the first quarter of 2007 of
$1.01. Adjusted earnings per share for the first quarter of 2007 exclude
the impact of charges related to the Company´s
tender offer for its $285 million Senior Notes. Reported diluted
earnings per share for the first quarter of 2007 were $0.71.
First Quarter Highlights
Record first quarter revenues of $1.57 billion, including $443.2
million from acquisitions completed in the last twelve months, grew
41.6% compared to the year ago period on a metal-adjusted basis
Operating income increased $24.2 million or 26.6%
Awarded first North Sea submarine cable wind farm project and
Company´s first long-haul repeatered
submarine fiber optic communications project, which together are
expected to be approximately $70 million in revenues
Successful integration of PDIC; well positioned to capture
commercial and operating synergies as well as build our position in
developing economies
International sales were approximately 70% of total revenues; now
one of the most geographically diverse U.S. based global manufacturing
companies
First Quarter Results
Net sales for the first quarter of 2008 were $1,568.4 million, an
increase of $460.5 million or 41.6% compared to the first quarter of
2007 on a metal-adjusted basis. This growth was principally due to the
acquisition of PDIC, the Company´s exposure to
global electrical infrastructure markets and favorable foreign exchange
translation partially offset by lower electric utility and outside plant
telecommunications cable demand in the United States.
First quarter 2008 operating income was $115.3 million compared to
operating income of $91.1 million in the first quarter of 2007, an
increase of $24.2 million or 26.6%. The increase in operating earnings
was principally from the addition of PDIC, favorable
lower-of-cost-or-market inventory adjustments of $3.9 million and strong
global markets for energy and industrial infrastructure products
partially offsetting lower demand and pricing for certain utility
products in North America. Operating margin was 7.4% in the first
quarter of 2008, a decrease of approximately 80 basis points from the
operating margin percentage of 8.2% in the first quarter of 2007 on a
metal-adjusted basis. This decline was principally due to the reduction
in the North American segment profitability.
Gregory B. Kenny, President and Chief Executive Officer of General
Cable, said, "I am pleased with the record
financial results the Company achieved in the first quarter. Because of
the strength of our broad-based global infrastructure products, the
Company was able to overcome rapidly rising copper prices during the
latter part of the quarter and a weakening U.S. economy to deliver
nearly 20% earnings growth. This is a strong testament to the success of
the Company´s efforts to diversify its product
and geographic reach over the last several years and our culture of
continuous improvement."
Market Update
European electric utility and electrical infrastructure markets remain
strong, offsetting the impact of Spain´s
weaker construction market. The Company´s
internal investment in Europe for submarine power cables, long-haul
submarine fiber optic communications systems, high voltage underground
cable systems, and products for the oil and gas industry continue as
planned. The Company was recently awarded its first submarine wind farm
project as well as its first repeatered long-haul submarine fiber optic
communications link project. Combined, these projects will contribute
over $70 million in revenues in the second half of 2008 and the first
half of 2009. Operating earnings in the Company´s
European business grew by 24.9% to $49.1 million in the first quarter of
2008 compared to the prior year. Operating margin was 8.9% in the first
quarter, an increase of 50 basis points from the 8.4% reported in the
first quarter of 2007 on a metal adjusted basis.
"Today, nearly 30% of the Company´s
production capacity in Spain is exported into other markets in Europe
North Africa and the Middle East. With our export experience from Spain
combined with PDIC´s operations in Thailand
which also reaches into these markets, we have excellent visibility into
the opportunities that these regions present. We are working diligently
to identify unique investment opportunities in these areas, with a
particular emphasis on energy and industrial infrastructure products
where we believe growth rates will far exceed that of Western Europe and
North America," said Kenny.
Strength in the Company´s Rest of World
segment is broad-based. The Rest of World segment includes businesses
with leading market positions in Central and South America, Sub-Saharan
Africa, Oceania and the Pacific Islands, as well as positions in
Southeast Asia, China and India. Revenue in this segment was up $432.4
million, principally related to the acquisition of PDIC which was
completed during the fourth quarter of 2007. Continuing strength in the
developing regions of the world is being driven by high levels of
construction and mining activities as well as programs to bring
electricity further into the rural areas of the countryside, such as
Brazil´s "Lights
for All" program. Operating earnings were
$35.0 million, an increase of $30.0 million from the first quarter of
2007.
In North America, revenues decreased 9.9% in the first quarter compared
to 2007 on a metal-adjusted basis while operating earnings decreased
$15.6 million. During the quarter, demand for electrical infrastructure
products, as well as networking, assemblies and infrastructure related
specialty products remained strong offset by declines in electric
utility and outside plant telecommunications product demand. Outside
plant telecommunications product demand continues to decline with the
industry´s investment bias towards fiber
initiatives. Electric utility year-over-year declines are partially due
to the strong cable demand in the first quarter 2007 resulting from
storm restoration work from the Midwest ice storms in the winter of
2007. Also, demand for low voltage and small gauge sized medium voltage
products supporting the residential construction markets, which began to
negatively affect the Company´s growth rates
significantly in the third quarter of 2007, continues to be weak.
However, demand for these products has improved sequentially in the
first quarter of 2008 compared to the fourth quarter of 2007, and should
improve sequentially again in the second quarter of 2008 due to the
seasonal nature of construction spending in North America. In the second
quarter, we expect demand for our MRO, industrial and data
communications products to improve compared to the prior year.
"Despite the recent reductions in cable
demand from the North American electric and telecommunications
utilities, the Company has continued to deliver significant
year-over-year overall earnings growth due to the strength of
international markets. Nevertheless, we continue to view the long- term
fundamentals for transmission cable in North America to be strong and
expect our low voltage electric utility products to recover with the
construction cycle in the United States," Kenny said.
Preferred Stock Dividend
In accordance with the terms of the Company´s
5.75% Series A Convertible Redeemable Preferred Stock, the Board of
Directors has declared a regular quarterly preferred stock dividend of
approximately $0.72 per share. The dividend is payable on May 23, 2008
to preferred stockholders of record as of the close of business on April
30, 2008. The Company expects the quarterly dividend payment to
approximate $0.1 million.
Second Quarter 2008 Outlook
"The Company is clearly benefiting from its
strategic investments to expand into new products and geographies more
than offsetting the ongoing weakness in certain product lines in the
developed economies. Despite the weakening U.S. and Spanish economies
as well as rapidly increasing copper and other raw material prices, for
the second quarter, the Company expects to report earnings per share of
$1.20 to $1.30 compared to adjusted earnings per share of $1.07 in the
second quarter of 2007, a double digit percentage increase, on revenues
of approximately $1.7 to $1.8 billion," Kenny
concluded. Reported diluted earnings per share in the second quarter of
2007 were $1.15, including $0.08 tax benefit from the reduction in
certain state deferred tax asset valuation allowances. Without this tax
benefit, earnings per share would have been $1.07.
General Cable will discuss first quarter results on a conference call
and webcast at 8:30 a.m. ET tomorrow, April 30, 2008. For more
information please see our website at www.generalcable.com.
General Cable (NYSE:BGC) is a global leader in the development, design
manufacture, marketing and distribution of copper, aluminum and fiber
optic wire and cable products for the energy, industrial, and
communications markets. Visit our website at www.generalcable.com.
Certain statements in this press release, including without
limitation, statements regarding future financial results and
performance, plans and objectives, capital expenditures and the Company´s
or management´s beliefs, expectations or
opinions, are forward-looking statements. Actual results may differ
materially from those statements as a result of factors, risks and
uncertainties over which the Company has no control. Such factors
include the economic strength and competitive nature of the geographic
markets that the Company serves; economic, political and other risks of
maintaining facilities and selling products in foreign countries;
changes in industry standards and regulatory requirements; advancing
technologies, such as fiber optic and wireless technologies; volatility
in the price of copper and other raw materials, as well as fuel and
energy and the Company´s ability to reflect
such volatility in its selling prices; interruption of supplies from the
Company´s key suppliers; the failure to
negotiate extensions of the Company´s labor
agreements on acceptable terms; the Company´s
ability to increase manufacturing capacity and achieve productivity
improvements; the Company´s dependence upon
distributors and retailers for non-exclusive sales of certain of the
Company´s products; pricing pressures in the
Company´s end markets; the Company´s
ability to maintain the uncommitted accounts payable or accounts
receivable financing arrangements in its European operations; the impact
of any additional charges in connection with plant closures and the
Company´s inventory accounting practices; the
impact of certain asbestos litigation, unexpected judgments or
settlements and environmental liabilities; the ability to successfully
identify, finance and integrate acquisitions; the impact of terrorist
attacks or acts of war which may affect the markets in which the Company
operates; the Company´s ability to retain
key employees; the Company´s ability to
service debt requirements and maintain adequate domestic and
international credit facilities and credit lines; the impact on the
Company´s operating results of its pension
accounting practices; volatility in the market price of the Company´s
common stock all of which are more fully discussed in the Company´s
Report on Form 10-K filed with the Securities and Exchange Commission on
February 29, 2008 as well as periodic reports filed with the
Commission.
TABLES TO FOLLOW
= = = = = = = = = = =
General Cable Corporation and Subsidiaries
- - - - - -
Consolidated Statements of Operations
- - - - - -
(in millions, except per share data)
- - - - - -
(unaudited)
- - - - - -
- - - - - -
- - - - - -
Three Fiscal Months Ended
- - - - - -
March 28
March 30
- - - - - -
2008
2007
- - - - - -
Net sales
$
1,568.4
$
1,009.2
- - - - - -
Cost of sales
1,355.7
849.4
- - - - - -
- - - - - -
Gross profit
212.7
159.8
- - - - - -
- - - - - -
Selling, general and administrative expenses
97.4
68.7
- - - - - -
- - - - - -
Operating income
115.3
91.1
- - - - - -
- - - - - -
Other income
1.4
-
- - - - - -
- - - - - -
Interest income (expense):
- - - - - -
Interest expense
(15.0
)
(8.9
)
- - - - - -
Interest income
2.8
3.0
- - - - - -
Loss on extinguishment of debt
-
(25.1
)
- - - - - -
(12.2
)
(31.0
)
- - - - - -
- - - - - -
Income before income taxes
104.5
60.1
- - - - - -
Income tax provision
(36.1
)
(22.2
)
- - - - - -
Minority interests in consolidated subsidiaries
(3.6
)
-
- - - - - -
Equity in net earnings of affiliated companies
1.1
-
- - - - - -
Net income
65.9
37.9
- - - - - -
Less: preferred stock dividends
(0.1
)
(0.1
)
- - - - - -
Net income applicable to common shareholders
$
65.8
$
37.8
- - - - - -
- - - - - -
Earnings per share
- - - - - -
Earnings per common share - basic
$
1.28
$
0.74
- - - - - -
Weighted average common shares - basic
51.4
51.1
- - - - - -
Earnings per common share-
- - - - - -
assuming dilution
$
1.21
$
0.71
- - - - - -
Weighted average common shares-
- - - - - -
assuming dilution
54.5
53.1
- - - - - -
= = = = = = = = = = =
General Cable Corporation and Subsidiaries
- - - - - -
Consolidated Statements of Operations
- - - - - -
Segment Information
- - - - - -
(in millions)
- - - - - -
(unaudited)
- - - - - -
- - - - - -
Three Fiscal Months Ended
- - - - - -
March 28
March 30
- - - - - -
2008
2007
- - - - - -
Revenues (as reported)
- - - - - -
North America
$
540.7
$
545.1
- - - - - -
Europe and North Africa
553.3
426.0
- - - - - -
Rest of World
474.4
38.1
- - - - - -
Total
$
1,568.4
$
1,009.2
- - - - - -
- - - - - -
Revenues (metal adjusted)
- - - - - -
North America
$
540.7
$
600.3
- - - - - -
Europe and North Africa
553.3
465.6
- - - - - -
Rest of World
474.4
42.0
- - - - - -
Total
$
1,568.4
$
1,107.9
- - - - - -
- - - - - -
Metal Pounds Sold
- - - - - -
North America
92.3
107.7
- - - - - -
Europe and North Africa
86.9
84.5
- - - - - -
Rest of World
98.1
5.5
- - - - - -
Total
277.3
197.7
- - - - - -
- - - - - -
Operating Income
- - - - - -
North America
$
31.2
$
46.8
- - - - - -
Europe and North Africa
49.1
39.3
- - - - - -
Rest of World
35.0
5.0
- - - - - -
Total
$
115.3
$
91.1
- - - - - -
- - - - - -
Return on Metal Adjusted Sales
- - - - - -
North America
5.8
%
7.8
%
- - - - - -
Europe and North Africa
8.9
%
8.4
%
- - - - - -
Rest of World
7.4
%
11.9
%
- - - - - -
Total Company
7.4
%
8.2
%
- - - - - -
- - - - - -
Capital Expenditures
- - - - - -
North America
$
9.0
$
4.1
- - - - - -
Europe and North Africa
21.1
12.3
- - - - - -
Rest of World
11.5
0.7
- - - - - -
Total
$
41.6
$
17.1
- - - - - -
- - - - - -
Depreciation & Amortization
- - - - - -
North America
$
8.8
$
8.2
- - - - - -
Europe and North Africa
7.0
6.1
- - - - - -
Rest of World
7.6
0.6
- - - - - -
Total
$
23.4
$
14.9
- - - - - -
- - - - - -
Revenues by Major Product Lines
- - - - - -
Electric Utility
$
545.0
$
385.1
- - - - - -
Electrical Infrastructure
395.0
259.3
- - - - - -
Construction
387.5
177.5
- - - - - -
Communications
202.5
187.3
- - - - - -
Rod Mill Products
38.4
-
- - - - - -
Total
$
1,568.4
$
1,009.2
- - - - - -
